Pension proposal gets cool reception

Staff and wire report

Published: Sunday, January 20, 2013 at 5:26 p.m.

Last Modified: Sunday, January 20, 2013 at 5:26 p.m.

TALLAHASSEE - A proposal that could help cities and counties pay down their massive liabilities for police and fire pensions is getting a cool reception from both the unions and from local governments.

The legislation would give cities more flexibility in how they use insurance tax revenue to fund pensions for police and firefighters.

Unveiled by state Senate Governmental Oversight and Accountability Chairman Jeremy Ring, D-Margate, the plan would allow cities and counties to fund existing benefits and future benefits with insurance tax revenue.

Currently, a law passed in 1999 allows the insurance tax revenues to be used only for "extra benefits."

There is some dispute about exactly what that means, but it could mean that cities like Sarasota that cut employee pensions would lose out on the insurance money.

<p><em>TALLAHASSEE</em> - A proposal that could help cities and counties pay down their massive liabilities for police and fire pensions is getting a cool reception from both the unions and from local governments.</p><p>The legislation would give cities more flexibility in how they use insurance tax revenue to fund pensions for police and firefighters.</p><p>Unveiled by state Senate Governmental Oversight and Accountability Chairman Jeremy Ring, D-Margate, the plan would allow cities and counties to fund existing benefits and future benefits with insurance tax revenue.</p><p>Currently, a law passed in 1999 allows the insurance tax revenues to be used only for "extra benefits." </p><p>There is some dispute about exactly what that means, but it could mean that cities like Sarasota that cut employee pensions would lose out on the insurance money.</p><p>"We're not taking away anyone's pension," Ring said. "We're not doing that. We are taking a surgical approach to the 1999 insurance premium issue."</p><p>No matter how much the rules are loosened, the insurance tax revenue will always be a drop in the bucket for local governments that are tens of millions of dollars in the red.</p><p>The City of Sarasota could lose about $500,000 a year after cutting police pension benefits. The city has an estimated $142 million in unfunded pension obligations.</p><p>If the state allowed the city to continue to receive the funds, its pension situation would not be so bleak, said the city's finance director, Chris Lyons.</p><p>But while they would gain flexibility under the proposed law change, local government officials are resisting it because they say the new rules would still be too restrictive.</p><p>"They held us hostage all these years," Lyons said. "It's just not right and I don't understand why they keep going down this path."</p><p>Members of the Florida League of Cities, including Sarasota City Commissioner Paul Caragiulo, went to Tallahassee to ask legislators to allow cities more latitude in managing their pensions.</p><p>"You certainly want to be respectful of your employees but you also don't want to promise them something that's not going to be there," Caragiulo said.</p><p>The policy decisions lawmakers made in 1999 are hurting cities and the state seems to ignore the municipalities' view, said Amber Hughes, a Florida League of Cities legislative advocate.</p><p>Talking to reporters after the meeting, Ring said he was not willing to go as far as cities want by completely repealing the extra benefits law. </p><p>Police and fire unions also said they would oppose more sweeping changes. David Murrell, executive director of the Florida Police Benevolent Association, said the organization could back some reforms.</p><p>"But we will not go along with getting rid of (the 1999 law) altogether. ... That takes us back to the dark ages, to the bad old days," he said.</p><p>Still, the unions were more circumspect about Ring's proposal, saying they would like to see some details changed.</p><p>"The overall scope of what I believe that the chairman and this committee are trying to do, we agree with that direction," said Robert Suarez, vice president of the Florida Professional Firefighters.</p><p></p><p><i>Staff writer Jessie Van Berkel contributed to this report.</i></p>